Revenue from Xbox content and services is also expected to decline.
While Sony has been reporting strong success with the PS5, Microsoft’s Xbox Series X and Xbox Series S consoles have also been faring well. The company reported its Q3 revenue to be 50 percent higher than the same period in the previous year. Hardware revenue was also up by 232 percent, despite issues with supply.
Unfortunately, those issues will continue for the coming months. In an earnings call following the third quarter results, CFO Amy Hood discussed the company’s expectations for gaming in the fourth quarter ending June 30th 2021. Revenue growth in gaming is expected to be in the “mid-to-high single digits.” However, “Significant demand for the Xbox Series X and S will continue to be constrained by supply.” Compared to the prior year, Hood said that “We expect Xbox content and services revenue to decline in the mid-to-high single digits.”
The decline in content and services revenue could be attributed to the lack of third party titles or major additions to Xbox Game Pass in the coming months. As such, Microsoft hasn’t announced any major titles releasing by June end. Things should pick up post-August heading into the Fall season, which is usually when the biggest gaming titles – including 343 Industries’ Halo Infinite – are expected to release.
In the meantime, Microsoft will be attending the all-digital E3 2021. The event is currently slated for June 12th to 15th.